SPEECHES & TESTIMONY

Statement of Commissioner Michael V. Dunn on the Memorandum of Understanding Between the Federal Reserve Board, the CFTC, and the SEC Regarding Central Counterparties for Credit Default Swaps

November 13, 2008

I am authorizing the Acting Chairman to sign this MOU because I believe that the clearing of credit default swaps is critically important to bring needed transparency to these transactions. Better regulation and oversight of these erstwhile opaque markets is needed, and the government agencies who may oversee these markets must work cooperatively and efficiently to ensure they have the necessary information to provide proper oversight. In addition, clearing of credit default swaps will serve to enhance our understanding of various products and transactions, and enhance our ability to better ensure market integrity and protect consumers.

I write separately, however, to express my concern that the MOU does not sufficiently describe the operational processes that are to be utilized in the sharing of information between parties. Accordingly, I respectfully suggest that the MOU signatories convene a public meeting to address this issue, and clarify the specific administrative and operational avenues that will be utilized to facilitate effective and efficient communication between the requesting parties.

Lastly, it is critically important to note that this MOU does not in any way alter the existing jurisdictions of any of the respective signatories.